| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Balance | €18.1B | €14.4B | €18.4B | €16.5B |
| Imports - M/M | 1.7% | -1.7% | -0.1% | |
| Imports - Y/Y | -10.6% | -12.4% | -11.2% | |
| Exports - M/M | -0.1% | 1.2% | 1.0% | |
| Exports - Y/Y | -4.0% | -1.8% | -1.7% |
Highlights
Seasonally adjusted the merchandise trade balance was in a surprisingly small €14.4 billion surplus in May, down from April's smaller revised €16.5 billion and, according to revised data, its worst performance so far this year. Unadjusted, the black ink stood at €13.4 billion versus just €4.9 billion a year ago.
The headline shrinkage partly reflected a 0.1 percent monthly drop in exports, with sales to the US down 3.6 percent and to EU members down 1.5 percent. Meanwhile imports compounded the damage by rising 1.7 percent on the month, with purchases from China up 2.7 percent and from EU members up 3.5 percent. Unadjusted annual export growth now stands at minus 4.0 percent while imports are down 10.6 percent on the year. Exports to Russia declined an adjusted monthly 7.4 percent while imports from Russia were down 17.3 percent versus April and 92.6 percent unadjusted on the year.
Today's update puts the German ECDI at minus 26 and the ECDI-P at minus 39, both measures showing overall economic activity moderately underperforming market expectations.
The headline shrinkage partly reflected a 0.1 percent monthly drop in exports, with sales to the US down 3.6 percent and to EU members down 1.5 percent. Meanwhile imports compounded the damage by rising 1.7 percent on the month, with purchases from China up 2.7 percent and from EU members up 3.5 percent. Unadjusted annual export growth now stands at minus 4.0 percent while imports are down 10.6 percent on the year. Exports to Russia declined an adjusted monthly 7.4 percent while imports from Russia were down 17.3 percent versus April and 92.6 percent unadjusted on the year.
Today's update puts the German ECDI at minus 26 and the ECDI-P at minus 39, both measures showing overall economic activity moderately underperforming market expectations.
Market Consensus Before Announcement
Germany's goods balance is expected to narrow slightly to a €18.1 billion surplus in May versus a greater-than-expected surplus of €18.4 billion in April that benefited from a rise in exports but especially from a sharp drop in imports.
Definition
The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.
Imports indicate demand for foreign goods and services in Germany. Exports show the demand for German goods in countries overseas. Given the size of the German economy, the euro can be sensitive to changes in the trade balance. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
Imports indicate demand for foreign goods and services in Germany. Exports show the demand for German goods in countries overseas. Given the size of the German economy, the euro can be sensitive to changes in the trade balance. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
